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R&D Tax Relief Changes

The environment surrounding R&D tax relief claims has been changing significantly over the last year and will continue to change significantly.

There are 2 conflicting goals, which the government has:

  • To increase the R&D activity being undertaken in the UK in order to advance the UK economy and, from a political perspective, to produce media headlines showing that the government is increasing R&D spend.
  • To try and reduce the significant amount of fraudulent claims which are being made in increasing numbers.

To achieve the first goal the government is widening the definition of R&D slightly.

In order to address the increasing level of fraud in R&D claims, the government has allocated an additional 100 employees to reviewing R&D Claims, with the plan to increase employee numbers further. In addition there has been a temporary hold placed on R&D repayment processing to allow HMRC to review R&D claims.